Arm Achieves Record Q2 Results

Today Arm published a letter to its shareholders containing the company’s results for its fiscal second quarter and three months ended September 30, 2024. The infographic below provides the key highlights:

Here are what the results mean and how they were achieved:

• Revenue of $844 million, which is up 5% year-over-year and due to record levels of royalty revenue and continued strength in license revenue. Notably, products based on Arm Compute Subsystems (CSS) are now becoming available, including Microsoft Azure Cobalt and Google Axion in the data center, and MediaTek’s new Dimensity 9400 for smartphone.
• Royalty revenue of $514 million, which is up 23% year-over-year. This is driven primarily by smartphone market recovery and the continued adoption of Armv9, which generated around 25% of royalty revenue in the quarter, up from around 10% a year ago.
• License and other revenue of $330 million. This is a 15% decline year-over-year as expected due to the normal fluctuation in timing and size of multiple high-value license agreements. However, Arm is seeing stronger partner demand for Arm CSS and has more than doubled Arm CSS licensees signed this fiscal year.  
• Non-GAAP operating income of $326 million resulting in a 38.6% non-GAAP operating margin, and non-GAAP earnings per share of $0.30.
• Demand for AI everywhere is leading partners to make long-term commitments to more powerful, power-efficient Arm technology. During the quarter, Arm and Meta announced the optimization of Meta’s new Llama 3.2 large language models (LLMs) for Arm CPUs with KleidiAI libraries, driving 5x improvements in prompt processing and 3x improvements in token generation compared to Llama 3.2 without KleidiAI.
• More than 300 billion Arm-based chips shipped cumulatively thanks to Arm’s world-leading compute ecosystem of technology partners, which also features more than 20 million software developers.

The full letter to shareholders is available on the Arm investor relations website (https://investors.arm.com/financials/quarterly-annual-results). Information about the Arm earnings conference call can be found here.